Re-Financing Businesses
The factoring industry offers excellent opportunites for business owners seeking to refinance their business.
Re-financing could be necessary following a difficult trading period, a major bad debt or the need to buy-out a shareholder.
In the case of difficult trading or a serious bad debt it is important that the business has a future. It may mean that the business needs to down size or consolidates for a period of time which may then allow the business to expand at a later stage. In both situations a financier would need to see some basic forecasts which findmeafactor can assist in preparing. Remember the better the case that is presented to a factoring company, the better deal you will be offered. It is no good saying that you will 'trade-through ' the problem. Particularly in our current climate, businesses are finding it increasingly difficult to trade-through, as suppliers themselves are facing increasing difficulties and in turn are less able to be supportive when one of their customers is struggling.
Once a plan is prepared we will assist in sourcing a facility and ensure that the case is well presented. Many factors like to provide facilities for struggling companies, as they feel they are gaining a potentially loyal client who will stay with them as they offered facilities in difficult times .
More serious situations may require a corporate voluntary arrangement. or a CVA.
CVAs are an excellent way of coming to a formal arrangement with your creditors providing you can demonstrate a good business going forward. Under such an arrangement creditors agree to write-off part of their debt and have the balance repaid over a number of years up to a maximum of 5 years. These arrangements are agreed by the Court.
Look at the simple balance sheet below
Fixed Assets £10,000
Current Assets
Debtors £100,000
Current Liabilities £150,000
Net Current Labilities £50,000
Net Deficit £40,000
By offering the creditors 50p in the £1 this balance sheet changes from one with net current liabilities of £50,00 to one with net current assets of £25,0000.
Many businesses are faced with a problem of a retiring shareholder or one who wishes to sell. A financing arrangement can be put in place to deal with such a problem and provide a solid base for the business going forward.
Other Financial Products
Whilst we mainly provide working capital solutions we are also in the position to arrange finance in the following areas: Vehicle Finance, Asset Finance,and Property Finance. We only deal with businesses not consumers.
The Next Step
If this is an area where you need assistance please contact us and we will advise you on a solution.